First of all, we need to admit that the U.S. government does create a lot of jobs for Americans. About one half of our entire national budget is spent on defense. So, if you work for Lockheed Martin, Boeing, Northrop Grumman, General Dynamics or other defense contractors, or if you work at one of the national labs that does defense research, or if you are in the military – Uncle Sam has created your job. The problem of course is that these types of jobs do not create additional revenue. i.e. the only customer, by definition, is the U.S. government. So the income that people receive from these jobs is sort of like taking money out of one pocket and putting it in the other – the total wealth of the country doesn’t increase – and by the way, for many people, the money to pay for these jobs is coming out of their pockets and going into the pocket of someone else. Remember – that is fully one half of all the money our government spends, and we have been doing that for many years. It’s a big part of our economy – such as it is.

The rest of our economy is in a shambles. We all know that. That’s why we have been depending on a real estate Ponzi scheme to make money for us for the past several years. Now that the bubble has burst, it is pretty clear that we can’t re-inflate that particular bubble anytime soon. We’ll have to find another way to make money for the part of the population that doesn’t feed off the defense budget. And this is where the problem lies. This is Obama’s Dilemma.

There are many places we can turn to illustrate the roots of Obama’s Dilemma, but perhaps none are so illustrative of the problem as everybody’s favorite store: Wal-Mart. The problem with Wal-Mart can be found in their motto: Save Money, Live Better Wal-Mart. We all like to save money and it is difficult to find any place that sells stuff for less than Wal-Mart, but that is exactly the problem, and it started a long time ago. Next time you go to Wal-Mart see if you can find anything (except food) that carries the label “Made in USA”.

For those of us old enough to remember, we know that once upon a time television sets were made in the USA. So were refrigerators and other appliances; so were cars; so were airplanes; so were clothes; so was furniture. I guess you can see where I’m going here. We, well not exactly we – but the wealthy people who actually run this country and it’s government – found that they could make a lot more money by building stuff in China and India and Mexico and Costa Rica and Egypt and almost anywhere that much cheaper labor could be found. These “Americans” who own the multinational businesses that make our stuff exported our jobs throughout the world. While the American people played Ponzi real estate bubble, the wealthy class exported our jobs. We now live in a multinational economy but the problem is that we can’t compete because our wages are too high. We can buy, but we can’t sell.

So, while businesses like Wal-Mart and many, many others flushed our economy down the toilet – while they made fortunes for themselves, most Americans were unaware of what was happening. Now we face a hard reality. The jobs are gone and they are not coming back. The bubble has burst and we can’t play bubble games anymore. We are a bunch of high rollers who have spent our last few dollars and our credit is no longer any good at the banks. We need jobs but, outside of more defense jobs, the government is unable to create anything that would have much of an effect.

So, President Obama dabbles with Green technology ideas – as if that will put ten or twenty million Americans back to work. We have cash for clunkers and rebates for first time home buyers and other little tricks that give temporary surges. It’s like when your car is out of gas and you add a pint of gas to the tank. It doesn’t take you very far. The question we all need to ask is this: can this thing be fixed? The answer is no – at least not very soon.

Our wealthy “un-Americans” have enriched themselves at the expense of the entire country’s economy. Globalization has been a boon to some Americans in the short run – but the short run is over – now we are in for a long-term disaster. Globalization means flattening, that which is high is lowered (that’s us) and that which is low is raised (that’s China, India, and soon to be Africa). A few of John McCain’s class will benefit but many, many more will suffer and our government has let this happen, slowly, over the past twenty to thirty years. There are many people to blame, but Obama is not one of them. Even so, he will be blamed if he can’t solve the dilemma.

The problem is that the solution is not palatable to the wealthy, ruling class. The solution is to scale back globalization. The solution is to level the playing field via tariffs on imported goods so that American made goods can compete again. Only then will there be jobs in the U.S. again. Our economy won’t be healed until we once again build televisions and furniture here. We won’t have stability until we build quality cars in this country that compete in price with foreign-made cars. We won’t have good technical jobs in this country until we have more than one company building commercial airplanes and at least one company that builds commercial ships.

Wal-Mart is not the cause of globalization, but it is the poster child for the siren lure of cheap foreign imports. Our economy won’t be finally healed until the Mom and Pop clothing stores and hardware stores on Main Street can compete fiercely with Wal-Mart. However, that is something that is abhorrent to many, if not most, of our very wealthy Senators and Congressmen, their sycophantic lobbyists, and the hidden oligarchs of our society.

Even so, it must be done, and how to make that happen is Obama’s Dilemma.

2 Responses

Business abhors uncertainty. Right now, it doesn’t know what to expect from Obama’s programs. It finds them unsettling and creating more questions than answers.

Businesses are saying they cannot assess the full impact the health care bill will have on their business models. Even the health care insurance companies are struggling to determine its impact.

Then there is the upcoming Cap and Trade fiasco waiting in the wings. This creates even more uncertainty about how it will impact their profit margin. All they know is that it will be negative. Whatever the costs, they will be passed to their customers. That means we will have less disposable income and means another negative impact upon the economy.

With so much uncertainty, business is waiting for these bills to become reality (better yet, fiction) while they are cut costs in anticipation.

On the senate docket is the Waxman-Markey climate and energy bill—aka the American Clean Energy and Security Act, ACES, H.R. 2454. That’s going to hit business structures, new homes, existing homes and transportation. It’s just another source of uncertainty about costs and what it means to business and another source of negative impact upon the economy.

Consumers are pulling back, saving their money, paying off bills but not spending it on the economy at normal rates. This creates more problems for businesses trying to weather the storm. It causes them to batten down the hatches even tighter. It’s no wonder employment rates are at historic levels.

It appears the problem affecting the economy is Obama himself. His brand of change creates fear, uncertainty and doubt.

Fixing the economy would then appear to be simple. Since he won’t resign, Obama should sit down and shut up.

If Obama were to do anything at this time, it would be to call for a press conference to announce he will not sign this version of the health care bill, that he will not sign the American Clean Energy and Security Act and that he will not sign the Cap and Trade bill. In addition, he should announce he will cut taxes for both business and individuals and will support legislation to force the banks to begin loaning to business and consumers.

Follow My Blog via Email

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 22 other followers

Visitor Count

144,294 hits

The Viral Epiphany

My new book, a thriller about a deadly worldwide pandemic caused by cloning an extinct virus is available as a digital download for Kindle readers at Amazon.com. Guaranteed to make you think. Click on the cover image to go to the Amazon download page.